Trump Furious With China For Not ‘Following Through’ On Farm Promise They Never Made

If you were hoping Donald Trump would strike an upbeat tone on trade as his negotiators gather with their Chinese counterparts in Shanghai for the first face-to-face, principal-level talks since things fell apart in May, you’ll be disappointed.

The president’s first order of business on Tuesday (well, after saying “Somali refugees” pose a terror threat) was to lampoon China’s economy and accuse the country of never “coming through”.

“China is doing very badly, worst year in 27 years”, Trump began. The Chinese economy grew at a 6.2% clip in Q2, the slowest pace in more than a quarter century, but still more than twice as fast as Trump’s MAGA machine.

The president continued, noting that China “was supposed to start buying our agricultural product [but there are] no signs that they are doing so”.

If you recall, there was rampant speculation that Trump was either exaggerating or outright lying late last month when he insisted that part of the handshake deal in Osaka involved purportedly massive purchases of US farm goods.

….amounts of agricultural product from our great Farmers. At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security. Importantly, we have opened up negotiations…

— Donald J. Trump (@realDonaldTrump) June 29, 2019

He made similar claims with regard to Mexico during the brief tariff standoff with America’s southern neighbor and those claims turned out to be wholly false. (The administration never explained why Trump lied about Mexico’s intent to ramp up agricultural buying, something many argued would have been nearly impossible considering the country’s already large purchases.)

Since the G20, there have been competing accounts of whether Beijing was, in fact preparing to buy more US farm goods, but a month on from the Trump-Xi summit, there’s little in the way of evidence to support Trump’s claims about Chinese buying.

“That is the problem with China, they just don’t come through”, he said Tuesday, before insisting that “Our Economy has become MUCH larger than the Chinese Economy is [sic] last 3 years”. (As ever, it’s not clear what Trump means – China’s economy is still growing faster than America’s.)

He went on to suggest that the negotiations are largely a waste of time. “My team is negotiating with them now, but they always change the deal in the end to their benefit”, Trump said, on the way to reiterating sentiments he expressed on Friday while speaking to reporters in the Oval Office. To wit:

They should probably wait out our Election to see if we get one of the Democrat stiffs like Sleepy Joe. Then they could make a GREAT deal, like in past 30 years, and continue …to ripoff the USA, even bigger and better than ever before. The problem with them waiting, however, is that if & when I win, the deal that they get will be much tougher than what we are negotiating now…or no deal at all. We have all the cards, our past leaders never got it!

That betrays an almost childlike understanding of China’s position. Beijing can (and will) play the long game if necessary and you can be sure there’s a contingency plan for a scenario where Trump wins a second term and no deal is possible.

The PBoC’s bag of tricks is, for all intents and purposes, bottomless, and Beijing has yet to really step on the gas pedal in terms of fiscal stimulus.

That’s not to say China is keen on blowing bubbles or giving up on deleveraging. They’re not. It’s also not to say Beijing is excited about deviating too far from their ambitions with regard to transitioning the economy to a more sustainable growth model and opening up. Again, they’re not. It’s just to say that China will do what it has to do.

Trump, on the other hand, is constrained in his capacity to influence US monetary policy and presumably limited in what he can do fiscally having already ballooned the deficit. In an interview with CNBC last month, the US president acknowledged that Xi’s ability to control Chinese monetary policy gives Beijing a leg up.

In any case, farmers should probably brace for more pain and, unfortunately, they appear to be keeping the faith. Despite a recent collapse in farmer sentiment tipped by the Purdue University/CME Group Ag Economy Barometer, a Farm Journal Pulse survey conducted early this month showed some 79% of farmers approve of the job Trump is doing, including 53% who strongly approve. That despite the government being forced to commit to billions in handouts to alleviate the suffering caused by the trade war.

Global Times editor Hu Xijin (who often tweets on behalf of the Party) delivered something of a warning to Trump following the US president’s latest broadsides. “Whenever it’s time to negotiate, the US side comes up with the trick of piling pressure. Really not a good habit”, he tweeted. “Americans need to change their negotiating style, show more sincerity, not just wield stick. The past one and half years have proved big stick is useless to China”.

Read more: 3 US-China Trade Scenarios As Talks Restart Amid ‘Somber Outlook’